US spot PGP falls to lowest since November
US prompt-month spot polymer-grade propylene (PGP) fell this week to the lowest in nearly five months on weak domestic demand for some smaller volume propylene derivatives, especially acrylonitrile (ACN) and propylene oxide (PO).
US PGP traded on Tuesday at 41.5¢/lb, down by 30pc since 5 March and the lowest price since late November.
US PGP's pricing in recent years has mostly been driven by supply changes, but market participants believe that some of the price drop since early March stems from weakness in PGP's smaller demand sources like ACN and PO.
ACN consumes about 7pc of US propylene, declining from 10pc over the last six years, and PO accounts for around 11pc of US demand for propylene. US demand remains weak for polypropylene (PP), which accounts for about half of domestic PGP demand, but has increased over the last few weeks, with operating rates improving. Rising PGP demand has been offset by falling production of smaller volume derivatives like ACN and PO, largely driven by elevated PGP spot prices in the first quarter that narrowed margins.
Cornerstone's 257,000 metric tonne (t)/yr ACN unit in Waggaman, Louisiana, has been down on an extended turnaround, according to market sources. That unit comprises 16pc of the US ACN capacity, according to Argus data. Another producer told Argus that ACN is being produced "to order," as demand has not been steady, saying "these are tough times" for ACN.
A PO producer in Texas began a planned turnaround this month that is expected to last until mid-May, reducing demand for US propylene. The turnaround has shut 20pc of US PO capacity, according to Argus data.
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US PVC export prices rise on tighter global supply
US PVC export prices rise on tighter global supply
Houston, 31 May (Argus) — US polyvinyl chloride (PVC) export prices have risen by $60/metric tonne on average in the last few weeks as tighter global supply and freight challenges outweigh rising domestic production. PVC export prices settled this week at $770-800/t fas Houston, touching $800/t for the first time since September 2023 and up from $720-730/t fas during the first week of May. US producers have raised operating rates following months of maintenance and unplanned outages, but that has had little effect on global supplies as some US producers say domestic sales volumes also have risen, tightening producers' inventories. At the same time, Chinese PVC producers have been reducing exports, specifically to Africa, India, and south Asia. Market participants claim freight rates from Asia are becoming too expensive, making Chinese PVC exports less competitive compared to supply from the US and Europe. This has allowed US producers to sell into previously competitive regions at higher prices. US export prices also have benefited from a force majeure declaration and shutdown at Orbia's Altamira PVC plant in Tamaulipas, Mexico. The 690,000 t/yr plant has been down since 5 May due to water shortages, and Orbia has made no public announcement on when the plant will resume operations. As traders and buyers in Latin America organized June shipments, the weight of the shutdown came into effect. Whether Orbia reallocates some supply from its Colombian operations into Central America remains to be seen, but US exporters expect Latin America to be increasingly tight on PVC either way. The lack of affordable resin from Asia due to freight rates further limits alternative supply options. US producers are unsure how long the elevated PVC pricing will last or if prices could rise even further in the weeks ahead. A few buyers are holding out on spot purchases with the expectation of prices falling as the summer progresses, however some volumes have been exported to Africa at a $800/t fas price equivalent, indicating that there is support for higher prices in the interim. By Rachel McGuire and Aaron May Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Possible Canadian rail strike start delayed again
Possible Canadian rail strike start delayed again
Washington, 31 May (Argus) — The start of a threatened strike by some union workers at Canadian National (CN) and Canadian Pacific Kansas City (CPKC) has been pushed back again as concerns about fuel and food supplies rise. If it goes forward, the strike would begin sometime after 17 June at the earliest. The Canada Industrial Relations Board (CIRB), which is investigating federal government concerns, has postponed reply comments to 14 June from 31 May. Original comments were due by 21 May. If CIRB ruled on 15 June, the Teamsters Canada Rail Conference (TCRC) would have to provide three days' notice to CN and CPKC before workers could strike. But a strike may still may not occur for another 60 days . If CIRB issues any orders, the parties would likely not be in a position for a strike or lockout to begin for two months, CPKC said on 16 May. TCRC members had authorized a strike to start as early as 22 May. The railroads and union met with CIRB on Monday and discussed the comments filed by groups that could be affected by a strike. Canadian minister of labour Seamus O'Regan asked CIRB earlier this month to consider requiring some rail service to continue in the event of a strike to help avoid health and safety issues related to propane supply. A number of concerns arising from the comments have been identified, with many focused on the impact to commercial and economic interests, CIRB said. The theme of certain comments concerned delivery of supplies of propane and diesel to critical areas, including and remote communities in northern British Columbia. Transportation also is important to the province of Manitoba which has been using rail to deliver fuel because of a Winnipeg products pipeline. Other comments focused on domestic and global food security. They noted some sectors are dependent on rail for transportation, such as fertilizer, potash and canola products, CIRB said. The potential, immediate impact on the supply of water treatment materials for several municipalities also was highlighted. Other commentators sought advance warning of strike, asking CIRB to provide notice of when a decision would be made or that there be an extension of the notice required before a strike or lockout. Negotiations between the railroads and TCRC continue. CN and the union will meet next week from 4-6 June. CPKC declined to comment on talks but met most recently with TCRC leadership between 15-21 May. By Abby Caplan Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
June Europe olefins contracts settled lower
June Europe olefins contracts settled lower
London, 31 May (Argus) — The June monthly contract prices (MCPs) for European ethylene and propylene were agreed today at €1,220/t and €1,105/t, respectively. Both MCPs fell by €30/t from the previous month, in line with the monthly change in naphtha prices, the feedstock for the majority of European cracker production. The decrease in average naphtha prices between May and April was €31/t, according to Argus assessments of naphtha para 65 cif NWE, with another commonly used index heard to be showing a similar decrease of just less than €30/t. The propylene MCP was agreed first, arriving promptly on the last working day of May after apparently straightforward negotiations between individual buyers and sellers. Producers had hoped to hold on to some of the fall in naphtha costs, but with spot prices easing in May and a more cautious demand outlook, buyers wanted at least the feedstock change passed through. The ethylene settlement followed soon after propylene. Ethylene supply is slightly on the longer side with producers balancing relatively firmer demand for some co-products with managing the ethylene balance. Spot prices have been steady at discounts close to 40pc of the MCP and producers are choosing to ease back production rather than sell at lower prices. Similarly, they were unwilling to go beyond the feedstock movement for the June MCP because of weak margins and the risk of oil prices reversing some of their significant falls in May. The European MCPs for ethylene and propylene are reference prices used by the industry as benchmarks for long-term contract pricing. Net prices paid vary based on individually negotiated pricing structures, including discounts to the MCPs. Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
Singapore launches commercial methanol bunkering
Singapore launches commercial methanol bunkering
Singapore, 28 May (Argus) — Singapore has launched commercial-scale methanol bunkering at the Tuas port, after a successful run of its first simultaneous methanol bunkering and cargo operation (Simops) on 27 May. Bunkering operations for shore-to-ship, ship-to-ship, and simultaneous cargo operations while bunkering methanol or alternative fuels like ammonia and hydrogen, will now be available at the Port of Singapore, the Maritime and Port Authority of Singapore (MPA) announced. This development comes after MPA's inaugural Simops of Singapore-based shipping firm X-Press Feeders' first dual-fuel engine container vessel. The Rotterdam-bound vessel was refuelled in Singapore with close to 300t of bio-methanol by MPA-licensed bunker supplier Global Energy Trading. The methanol bunkering occurred concurrently while vessel containers were restowed and loaded, and was supported by digitalisation of the bunkering process for near real-time visibility for various stakeholders. All crew members were trained to handle methanol as a marine fuel and respond to emergencies, given that safety remains a key consideration when bunkering alternative fuels. X-Press Feeders' vessel was the first of 14 dual-fuel vessels that it has ordered. The China-built vessel is equipped with a German-designed dual-fuel engine and has the flexibility to operate on green methanol. The firm plans to operate its green methanol-powered feeders mostly in the ports of Rotterdam and Antwerp-Bruges, where it has a fuel supply contract with chemical manufacturing firm OCI Global. "We look forward to working with other like-minded partners, including on the use of digital bunkering and mass flow meter solutions, to operationalise the delivery of the new marine fuels in Singapore," MPA chief executive Teo Eng Dih said. Singapore is steadily advancing towards its multi-fuel transition for maritime decarbonisation. Another ship-to-ship delivery of 1,340t of blended 20pc bio-methanol combined with 80pc of conventional methanol was completed on 24 May. The alternative fuel blend is reported to provide 31pc in CO2 equivalent savings on a tank-to-wake basis as compared to operating on conventional very-low sulphur fuel oil (VLSFO) for the same distance. The Argus -assessed price for VLSFO stood at $582.68/t delivered on board (dob) Singapore on 27 May, while prices for B24 were assessed at $720.50/t dob Singapore. By Cassia Teo Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.
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